Brokers See Possible Recovery For Real Estate Market
By: James Kinsella
A number of real estate brokers in the town of Barnstable report that the slumping residential real estate market of recent years may have turned the corner in 2011.
“We have seen an awful lot of activity,” said Brian Cobb, owner of Century 21 Cobb Real Estate in Centerville. “There are a lot more buyers than in 2010. The prices are down, and the interest rates are at record lows.”
“I saw sellers get more realistic,” said Adrienne Siegel, owner/broker of Strawberry Hill Real Estate in Hyannis. “I saw buyers not so afraid to go forward… Yes, my volume has picked up.”
“There was much more of an active market in 2011 than in the past two to three years,” said Ronald Mycock, the owner of Mycock Real Estate in Cotuit. “Things that had been sitting sold.”
Mr. Mycock estimates that home prices have dropped 35 percent from the peak of the market about five or six years ago.
In retrospect, 2011 may prove to be the year of transition for the market, said James Murphy Jr. of Murphy Real Estate in Osterville.
“Perhaps the bottom was found and perhaps the corner was turned,” Mr. Murphy said. “The value is a little better. The prices are a little worse…. The confidence is starting to return.”
“We had a strong fall market in 2011,” said Judy Notz, the owner of Seaport Village Realty in Hyannis. “We didn’t have that the year before.
“I think that we’re turning,” Ms. Notz said. “People realize that we’re at the lowest point.”
She said her office saw more sales in 2011.
Ms. Siegel said the holiday season, from Thanksgiving to New Year’s, usually is quiet for her office, but has been very busy.
The less expensive houses and condominiums saw the greatest amount of activity in 2011, the brokers report.
“The lower price range was where the action was,” Ms. Notz said.
Single-family homes selling for less than $200,000 are drawing a lot of interest, as are condominiums selling for less than $120,000, Ms. Siegel said.
“The first-time homebuyers are out in droves,” Mr. Murphy said. “There hasn’t been a better time in 40 years. It’s much better than renting.”
Low prices even have appeared on houses in more expensive villages.
Mr. Cobb said a number of houses now are selling for less than $250,000 in Osterville.
Mr. Mycock said a number of homes in Cotuit are selling for under $200,000, prices that have not been seen in that village for a decade or more.
Although brokers say plenty of loan money is available, they also say that lenders also have tightened up on their credit requirements, which have posed problems for a number of first-time homebuyers.
Off-Cape residents looking to acquire vacation homes also form a significant part of demand for the lower-end properties, the brokers say.
Activity is far slower in the so-called middle market–houses that might range in price from $325,000 to $500,000.
“What’s selling are the unique properties,” perhaps those with an auxiliary apartment or a marsh view, Ms. Siegel said.
Mr. Mycock told of a Cotuit house that was purchased in 2005 for $395,000. The property has been on the market for two years with a listed price of $325,000, “and it’s not moving,” he said.
As for the most expensive section of the residential market, properties that can range into several millions of dollars, Mr. Murphy said he’s seeing more activity.
In the 18 months preceding May 2011, he said, only one property sold for more than $4 million in the town of Barnstable.
Since then, he said, close to 10 such properties have sold in the town.
But Mr. Cobb said the higher end has not been immune to price declines.
A property that sold for $1.5 million in 2005 might now sell for less than $1 million, he said.“Prices have come down everywhere,” he said.
In Cotuit, Mr. Mycock said, he is not seeing high-end sales, but rather new construction at and renovation of high-end properties.
He estimates $20-30 million of work is under way.
The freshening of the high-end properties, he said, will pull up values in the village.
As for lenders, the drop in prices and interest rates has helped to generate more loan activity.
David Brennan, senior vice president for mortgage lending at the Cape Cod Five Cents Savings Bank, said the number of purchase mortgage loans issued by the bank in Barnstable County, which includes the town of Barnstable, rose 12 to 15 percent in 2011.
As of late December, Mr. Brennan said, long-term mortgage rates had reached record lows in the 4-percent range.
The Federal Reserve, he said, had said the low rates will continue into 2013.
Mr. Brennan said the bank also has been seeing an increase in mortgage loans for the construction of new houses.
“We’re cautiously optimistic,” he said. “We see things stabilizing. We see some positive trends in the market.”
While brokers see 2011 as a possible turning point in the market, a number of them also caution against expectations of a rapid recovery.
“We’re in a long cycle,” Ms. Siegel said. “Not a good cycle, but a long cycle.”
“To my mind, it’s the very beginning of the recovery process,” Mr. Mycock said.Mr. Murphy was more optimistic.“I’ve seen the cycles,” he said. “It’s all set for another run to the good side.”
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